The Australian government has released a new consultation document with the aim of implementing regulatory measures for crypto exchanges, with the primary goal of minimizing risks for consumers.
According to the document, the proposed regulatory framework will be applicable to digital asset service providers that pose similar risks to those seen in traditional financial institutions.
The Australian government is aiming for a flexible approach to crypto regulations, drawing inspiration from existing regulations for conventional financial institutions. These established rules will serve as a model for overseeing cryptocurrency activities within the country.
In this context, the government seeks to utilize the Australian Financial Services Licence (AFSL) framework to ensure consistent supervision and protection for consumers using digital asset services. It’s important to note, however, that the dynamic and rapidly evolving nature of the crypto industry means that the implementation of this proposed framework may require adjustments as the legislative landscape develops in the future.
The primary purpose of the consultation paper is to solicit feedback and insights regarding the proposed regulatory framework, and any references to amending existing legal frameworks signify the government’s policy intentions.
The proposed framework has multiple objectives, including safeguarding consumer interests, fostering innovation, and aligning Australia’s digital asset regulations with global standards.
Furthermore, the consultation places substantial emphasis on creating a level playing field for both traditional financial institutions and digital asset finance organizations, acknowledging the global consensus on the importance of this priority.
However, the document highlights that certain digital assets, particularly those used in activities like video gaming, gambling, and the metaverse, do not fit the definition of financial products. To address this, it suggests potential amendments to the Corporations Act 2001 to establish a new financial product category specifically for regulating these activities.
It’s worth noting that on April 5, Australian Senator Andrew Bragg introduced a draft bill aimed at safeguarding consumers and promoting investor protection, further underlining the Australian government’s commitment to regulating the crypto industry.